The costs to start a flower shop will vary greatly depending on whether you are purchasing a building versus renting, how much inventory you stock, the quality of equipment and furnishings and if you purchase new or used. With almost two decades working with startup florists, here is a rundown of costs you will need to consider when starting your flower shop.
Location – I won’t venture a guess as to costs to expect for a building but keep in mind, successful florists locate in an area with high foot traffic or along a road with high traffic volume. A common mistake that I have seen made is when a business owner has narrowed down their choices to one location that has high visibility but a high price tag and another location “just a couple of blocks off the main street” and is half the price or less, they pick the cheaper option to save money. What I have seen however is that the high visibility location wins every time because what ends up happening at the less visible location is the owner ultimately has to invest heavily in advertising to get people in the door and ends up negating the cost savings. There are exceptions to this as when shops in smaller markets have no competition or the owner is buying a shop that has high name recognition. Another exception is when you can be in very close proximity to a closely aligned operation such as a wedding dress shop, hospital, nursing home, or funeral home as people going to those places will need your product. The bottom line is get the highest visible shop you can afford. Another cost to plan for is renovations. Hopefully they are minimal but I have had many clients overestimate their abilities or underestimate the challenge of renovating their building and costing significantly more than anticipated.
Equipment – The list of equipment needed to run a flower shop is fairly short and in many times can be found used at terrific prices. Refrigerated cases and display cases are must haves to increase the shelf life of your flowers and to allow for having delicate flowers in inventory. Keeping flowers at an optimal temperature and humidity level is essential to maintaining a high quality product. Wilted or temperature-damaged flowers are unattractive to consumers and are heavily discounted. To increase your sales, a delivery van may be a good investment, but be sure to calculate the cost of running that van and the driver’s pay and incorporate it into the final price as I have worked with shops that were losing money because of their deliveries either through inefficient delivery scheduling or not enough delivery volume to support the costs. Flower shop equipment costs can range from $3,000 – $30,000 depending on the size of your store, brand and condition.
Furniture & Fixtures – The amount of furniture and fixtures will vary depending on how much retail product you plan to offer but at a minimum you will need a large table to consult with clients, retail shelving to display products, shelving to store supplies, office desk to work from and work benches to assemble flowers. All of this can be purchased used but consider buying a relatively nice table and chairs to consult with clients. Ratty and uncomfortable client furniture will send an image that isn’t professional, plus uncomfortable chairs will have your clients thinking about their butts more than buying from you. Costs here will likely range between $500 – $5,000.
Computers & POS – A computer to check email, process bills and order supplies is a must. You will also need either a cash register or Point of Sale system to keep tabs on sales. If you can afford it, a POS system will also help you manage inventory and help with the bookkeeping. Figure on spending $1,000 – $3,000 depending on how sophisticated you go.
Supplies – The supplies needed to run a flower shop are pretty basic and can be purchased at most hobby stores or specialty online retailers. Here is an expanded list for flower shop supplies. Starting flower shop supply costs will typically be around $300.
Inventory – Of course you are going to need flowers for your shop. My best advice for a new florist is to find a local supplier that will allow you to purchase in small quantities. This way you don’t have to lay out a lot of cash initially and you will minimize the amount of inventory that could go bad as you may not have a handle on what will sell or to properly care for a large stock. If you can make a quick trip to your supplier, your inventory can be very minimal, but will be more work for you. Flower costs will vary throughout the season depending on what is in season and the demand. The amount of initial inventory will vary greatly depending on the size of your store, size of the market, ease of access to suppliers, type of inventory held, etc. A rough range for a starting florist would be from $500 to $5,000.
Profit margins are typically 60% – 80% on the cost of flowers but expect a lot of waste, plus the cost of your overhead.
In addition to your flower inventory, you will also have items such as vases, cards, card holders, paper and other assorted periphery items. Figure on an additional $500 – $1,000 for starting accessory inventory.
Employees – Employees are another cost to factor when starting your flower shop. If you plan on bringing an employee on, you may want to consider having 3-6 months of their salary on hand in case profits don’t immediately come in the door, especially if you have someone talented in mind. It’s very hard to find good, dependable help and if you can’t afford to pay them when the business is getting off the ground you may not have another chance in the future. For talented help figure on $15 – $20 an hour (including payroll taxes) depending on the local market prices. While this may be on the higher side, six months worth of full-time wages on-hand at startup would be $20,800.
One word of caution, even if you aren’t planning on hiring an employee at the start, you probably need to pay your personal expenses. Many new business owners find out they don’t make enough profit during the first few years to pay themselves a steady paycheck. Be sure to assume you won’t make a profit for the first year and have your living expenses set aside so you can give this business an honest go.
Advertising – I have a more in-depth article on advertising a flower shop but keep in mind that marketing is the life blood of your business and is what keeps people coming in the door. I have seen many people skimp here and undermine the ability of the business to generate sales. You may be able to back off of some marketing after you are established but for the first few years you will be trying different types of advertising. While there are some constants, some marketing is more effective in some communities that in others. What is important is asking your customers how they found you and the areas that don’t get sufficient response you need to eliminate that channel. Advertising is an investment and you want to make a positive return on investment. Budget between $10,000 – $30,000 in your first year to get awareness that your business exists.
Roughly you are looking at cost to start a flower shop between $36,000 – $95,000 plus building/rent and renovations. I have seen people start off with less but often struggle, but don’t kid yourself that you can start off with a lot less. The costs to start a flower shop are pretty significant but if you start off with too little, you could be setting yourself up for failure.
Entity Formation – As a business, you have the option of forming as a sole proprietor, partnership, corporation or LLC. There are various pros and cons to each, but a great resource to forming a flower shop LLC, corporation, partnership or sole proprietorship LLC-Made-Easy.com.